Just over a year ago, Goldman
said its clients were asking when the "party was going to
end" as shares of companies like Yelp and Facebook exploded
higher during the first half of 2014.

For Facebook, the party hasn't stopped. For Yelp, the party is
definitely over.

In an email on Wednesday,
Eric Jackson, a prominent tech investor, said that Yelp looks
like it's in a "death spiral" and that it's unclear the company
can pull itself out from here.

On Tuesday night, Yelp reported earnings that were a
disappointment, but what really seems to be spooking investors,
at least in Jackson's view, is the
resignation of Yelp chairman
Max Levchin from the company's board.

Here's Jackson (emphasis added):

[Yelp's] Chairman, Max Levchin, announced last night he was
leaving the board to pursue other interests. Other
interests? He's been doing a fine job of that for the
last few years while serving on the boards of Yelp and Yahoo.
Does he really need to drop off the Yelp board — as Chair no less
— to pursue those other interests? If he was going to
drop off any board, why wouldn't he take himself off the Yahoo
board where he's not Chair if this is just about freeing up more
time?

Jackson argues, then, that Levchin's departure seems to be
about a fundamental disagreement between him and CEO Jeremy
Stoppelman over whether the company should be sold.

Yelp has not responded to a request for comment.

During the spring, reports said Yelp was
exploring a sale, but earlier this month Bloomberg
reported that the company had halted the process and would
not sell itself. That report said the company had been approached
by "several companies" but is no longer interested in
selling.

In a note to clients after Yelp's report, analysts at
SunTrust noted the timing of Levchin's departure — which they
said make them "unnerved" — but were less direct than Jackson
about drawing the line from one to one.

Jackson also added that Tuesday marked the fourth straight
quarter that Yelp's earnings missed expectations, and that after
its Q1 report in the spring reports first surfaced that the
company wanted to sell.

Then, the stock was at $37. Now it's at $24.

In its note, SunTrust highlighted other issues surrounding the
company that led the firm to "reticently maintain" its "buy"
rating on the firm.

Among SunTrust's concerns were Yelp's apparent inability to hire
salespeople (the company lowered its salesperson headcount growth
target to 30% from 40%), which the firm noted was "the first time
we've heard of the hiring constraints."

SunTrust noted there is "less disclosure" at the company given
they will no longer report total unique visitors.